Australian consumers continue to shop in record numbers. Australia Post reports that online shopping experienced 16.6 per cent year-on-year growth in January 2022, with 5.5 million households shopping online. With numbers indicating consumer engagement remains strong, particularly in the e-commerce space, retailers have an opportunity to maximise on potential sales.
Hyperpersonalisation is growing in the retail sector as a means of engaging consumers and building greater customer trust and loyalty. It lets retailers capitalise on the amount of customer data available and create more personalised customer experiences based on their preferences, interests, and even locations.
Research from the Office of the Australian Information Commissioner (OAIC) shows that 58 per cent of Australians agree it is fair to share some information if they want to use a digital service, and 48 per cent agree that, if they have to receive ads, they would prefer that those ads be targeted to them. By leveraging data to create more seamless customer experiences that are tailored to individual shoppers, retailers can achieve increased engagement and enhanced customer loyalty, which ultimately result in greater returns.
Retailers can build their relationships with consumers with repeated one-on-one engagement throughout the customer journey. This provides opportunities for retailers to gather information on customer preferences, including how they act, feel, and behave. This is essential given the unpredictability of today’s market and the dynamic nature of consumer behaviours.
However, to achieve greater consumer trust, retailers must also consider the impact of hyperpersonalisation on consumers’ data privacy and take steps to mitigate risks and alleviate concerns. Research from Deloitte shows that 89 per cent of Australian consumers believe that information used to track them online should be protected under the Privacy Act.
It is essential that retailers address these concerns to improve their relationships with consumers and protect their data as much as possible. One of the most critical steps that retailers can take is to prioritise transparency and consent in sales communications.
For example, Deloitte’s research reports that 85 per cent of consumers are concerned about the use of internet cookies that track online activity to sell to other companies, yet only four per cent of companies use a cookie pop-up on their website to inform visitors that their data is being collected. This gap must be rectified for brands to build greater trust with their customers through hyperpersonalisation.
Additionally, retailers need to ensure that customer consent is achieved appropriately. This includes being transparent about the collection and use of customer data without hiding it in lengthy terms and conditions or policy documentation; this information should be provided upfront to customers for their reference.
This is especially important for customers concerned about the misuse of their data. For example, according to the OAIC, 84 per cent of Australian consumers consider it misuse for organisations to use data for a purpose other than why it was supplied in the first place. Retailers must also consider the best ways to securely store customer data.
Know where privacy intersects personalisation
It is critical that retailers understand where data privacy and personalisation intersect in order to deliver the best possible customer experience while simultaneously achieving the best possible return on investment. To do this, retailers must take the time to understand the best practices in terms of data collection and privacy. Clearly, consumers have a heightened awareness of data collection and use. However, while some businesses may see this as a deterrent, successful businesses will recognise the opportunity this presents to enhance those customer relationships.
When customers trust the businesses they engage with and understand the value in sharing their data, such as receiving more relevant advertising or loyalty rewards, they are more likely to share that data, especially if they are certain that it will only be used for the purposes clearly stated by the businesses. At the same time, businesses must recognise that customer preferences and their attitudes towards data collection and privacy will change over time.
As such, it is essential that organisations continue to provide opportunities to opt in or opt out of data collection at different points throughout the customer journey, letting customers maintain control over their privacy. By doing this, savvy retailers can deliver improved customer experiences while driving increased marketing effectiveness. Through prioritising consent and transparency around data collection, businesses will increase the levels of customer trust and respect.
Priyanka Roy is enterprise evangelist at ManageEngine.